The big job re-shuffle

Oct 28, 2021 | Macro | 0 comments

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A massive impact of policies to address recovery from COVID is the restructure of the employment market which may force a revolution in the use of human resources and in automation.

This year, a record number of Americans uttered the words “I quit” and left their jobs. According to the Bureau of Labor Statistics (BLS), the 4.3m people who quit in August didn’t hurry to find new jobs as the unemployment number reached 7.7m and the number of job openings jumped to 10.4m.

BLS data shows that 892,000 workers quit in accommodation and food services, while 721,000 retail workers left their jobs. Meanwhile, 534,000 workers resigned or quit their health care and social assistance positions.

For foodservice companies the exodus is taking its toll. Domino’s CEO Ritch Allison said staffing challenges had impacted the system in terms of reduced operating hours and delivery service times. Domino’s recorded a 1.9% fall in same-store sales in the third quarter, after 41 straight quarters of US same-store sales increases. Sales for the period totalled US$998m, compared to analysts’ projections of US$1.03bn. Allison said Domino’s is looking at its wages, compensation and rolling out an applicant tracking system to help with hiring but stopped short of giving assurances that the problem will be fixed anytime soon.

The quit-rate is at its highest since BLS started tracking such data in 2000 and is the sixth consecutive month of very high quitting rates and according to labour experts it signals changes are coming to the US labour market.

Former US Secretary of Labor in the Clinton Administration Robert Reich said employees did not want to return to backbreaking or boring low-wage jobs. American workers are burned out and as the labour market tightens, workers are feeling empowered. Its turning into a workers’ market. And while pandemic uncertainty is decreasing, vaccines are widely available and the economy is rebounding in the US, workers are not rushing to take up new employment.

A number of factors are driving the changed workforce behaviour according to economists. Wages not keeping up with increasing consumer prices, lack of career progression in low-income jobs and pandemic fatigue are some of the drivers of change.

Associate professor of management at Texas A&M Anthony Klotz dubbed the trend ‘The Great Resignation’ – tantamount to a general strike – and according to him, there is a silver lining! The changes could force companies to raise wages, increase benefits and begin to offer more flexibility to attract and retain its workforce. Bernie Sanders might get his way! Klotz says organisations have an opportunity to think about flexibility more innovatively.

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